Single Marketing Channel: A Business Model "NOT" To Follow

Hey, great story, David…and your comment is right on. It is simply astonishing that a business would set itself up for failure based on a single business model. It's like investing in only one item, and hoping like hell it stays afloat. "Don't put all your eggs in one basket" is still good advice.

What really amazes me though, is that this was done on such a scale (hundreds of millions of dollars) on such a flimsy premise; the 'search term arbitrage' set-up had disaster written all over it from the beginning. Hell, when I started seeing the small players doing this and some guy in his basement was making a few thousand a month, I figured there was no way this was gonna last. It all seemed so dishonest and underhanded, sort of sleazy like using black hat SEO techniques that were used 10-12 years ago. Like trying to make a buck without earning it. Stuff like that just has no longevity, so why waste your time?

A brilliant business model that doesn't hold water - You're dead on Dave. Glad to hear your wisdom come shining through.

More people should understand the process of just doing good business. No business is an island. Even the big "G" has so many streams of income that I doubt any one person knows them all.

Businesses require diversity and when they fail to manage changes in the market or fail to actually embrace the changes that will naturally occur - More often than not, they die - And a $160 million dollars is going out in style

Tens of Thousands of these sites hit the floor in the AdSense days. "Oh wow, I just lost all my income, because all the sites I built were … This isn't fair." what hundreds or thousands said - Fools! At US$38 per click to have the most prominent ad link on the Google page - How long would most of us stay in business?

Right on…as my mentor Dan Kennedy says, the worst number in any business is "1". Those who depend upon one source or channel of leads are begging for trouble.

Those of us who spend a lot of time online tend to think that even using the Internet as our only source of leads is the right approach, even if we're using multiple channels within that arena (e.g., PPC, organic search, social networking, etc.) Again, IMHO, big mistake.

A lot of my business in the Internet arena continues to come from off line sources, whether that be speaking gigs, personal referrals, or whatever. And I know I need to expand the channels there.

This article is a good "wake up" call for all of us.

Thanks, David.

I've been a moderator at a couple of online marketing/SEO related forums for awhile now. I can't begin to tell you how many people have shown up over the years crying over the "unfairness" of it all every time big bad Google changes the algorithm, because their site that used to rank in the top 10 is no longer found, and they're having to lay off people or potentially close their business because their only source of traffic has dried up. They want us to give them the "magic formula" that will fix the problem and put everything back the way it was.

They never like to hear it when we tell them there is no "magic formula," that's the way it goes and they shouldn't have relied entirely on free search results for their livelihood. About the only thing we can tell them is next time to not put themselves in the position of relying on a single traffic channel in the first place, and to have contingency plans in place should any traffic channel suddenly dry up — because about the only thing they can count on is that things are going to change. And when things change it will likely be overnight… and they need to be prepared.

Thanks for this article, David! The point can't be made too often, IMHO.

@ Tim

Putting all of your eggs in one basket is such an old saying but there is so much business truth in this simple statement.

* Single Business Model.

* Single Marketing Model.

* Single Traffic Source.

All point to the same possible undesirable future.  You can see the evidence. The house of cards comes crashing down.

So the question becomes what is the best business model and marketing model?

@ Chris

You make a good point. The "Big G" has diverse channels and is playing and moving in every media on the planet. In fact, their primary model is data aggregation which holds the intelligence to move into the other media steams. I love their model!

I think if we would watch their model and play with them and not against them, we might find more success. Heck, it is good to learn these lessons without taking a $160million loss.

@ John

The power of "1" does not apply well in business for sure. Getting out and everywhere and creating identity may be the key. My Dad used to tell me, "if you can count all of your money and you know where all of it is coming from you have not grown your business big enough."

We have to remember that people still live offline and the internet is a media and a channel to get to the people.

@ Diane

Wow… you said that well. There is no "magic formula". It is what it is and no one likes to hear that humble truth.

The game has not changed and people are still looking at the world as fair and unfair. It is not that at all. I think that the world is just indifferent. Google has a model of listing and indexing content so that the user of their listing service can start to find the information that they want easily. That is there mission and their business model is built around this. Anytime we move "against" that basic part of their model we are going to have problems.

The only thing that we can be sure of is change. And the search engine space proves that with every filter change, index update and algorithm modification.

Thank you all so much. Some good thinking here.

So I guess that this means that we are going to have to stop hiding behind our computer screens and actually create business "outside of the Matrix". Good stuff.

For some reason I *knew* you were smart.

Yep; been there! Twice.

The engineering office in Portland, OR. had only one main client - Intel. When chip prices went south, so did my job! Same thing happened in Richmond, VA.; one client - Philip Morris - and the writing on the wall on smoking in the U.S. had been visible for quite a while. Still, not much action to gain new and diversified clients, and the result - hit the road again! Sigh.

For many of my blogging friends, at least 60% of their traffic come from Google.

That certainly something to think about. Although they don't rely on one traffic source, it is very significant.

I use article marketing to drive traffic too, but some of my best articles rank very well in Google too.

Although I use email marketing, social media and pay per click to certain extent. My favorite is still organic search (for getting new visitors).

So yes, it is indeed hard to "diversify" traffic. I'd like to see more ideas and coverage on this topic, David.

@ Brian - Thanks Dear Sir. I am still learning.

@ Robert - Thanks for the examples. This single marketing channel idea obviously does have any legs for any business. The thing that is so interesting is that when a business is not setup correctly the workers are the ones who really suffer. Business is business.

But, if you are going to take on employees, make sure that the model is sound?

@ Hendry - Online Article marketing. Offline marketing. Radio. TV. Print Ads. Letting the visitor find you everywhere they have attention and interest is the key. Thanks for bringing that forward. I will continue to look into this topic. New Customers. New Visitors. New Channels is the best insurance against the "Big G".